Money and Production, and Liquidity Trap

Pradeep Dubey and John Geanakoplos ()
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John Geanakoplos: Cowles Foundation, Yale University, https://economics.yale.edu/people/faculty/john-geanakoplos

No 1574, Cowles Foundation Discussion Papers from Cowles Foundation for Research in Economics, Yale University

Abstract: We prove the existence of monetary equilibrium in a finite horizon economy with production. We also show that if agents expect the monetary authority to significantly decrease the supply of bank money available for short term loans in the future, then the economy will fall into a liquidity trap today.

Keywords: Central bank; Inside money; Outside money; Incomplete assets; Production; Monetary equilibrium; Liquidity; Liquidity trap (search for similar items in EconPapers)
JEL-codes: D50 D51 D52 D58 D60 E12 E31 E32 E41 E42 E43 E44 E50 E51 E52 E58 E63 (search for similar items in EconPapers)
Pages: 26 pages
Date: 2006-07
New Economics Papers: this item is included in nep-cba, nep-fmk, nep-mac and nep-mon
Note: CFP 1200
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

Published in International Journal of Economic Theory (2006), 2(3/4): 295-317

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Related works:
Journal Article: Money and production, and liquidity trap (2006)
Working Paper: Money and Production, and Liquidity Trap (2006)
Working Paper: Money and Production, and Liquidity Trap (2006)
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